Recently, documents disclosed by the Shanghai Stock Exchange showed that Junzhijian Investment, Haizhiyuan Investment, Agricultural Bank Huili Fund, and ICBC AXA Asset Management were supervised and warned by the Shanghai Stock Exchange due to irregularities in the offline launch process. It is worth noting that the problems revealed by the four institutions are highly concentrated in two areas: first, inadequate internal system construction and inadequate implementation of internal controls; second, insufficient internal research and unprudent pricing decisions. “The wording of the four penalty decisions is highly convergent, which just shows that the problem is no longer an individual case, but a shortcoming in the industry system.” Tian Lihui, a finance professor at Nankai University, told First Finance Correspondent that at a deeper level, the root cause of this phenomenon is a structural mismatch between new business positioning and compliance investment. “When a new business is viewed as a low-risk arbitrage tool for a long time, there will inevitably be a gap between the resources allocated by the institution and the professional pricing responsibilities required by the regulatory requirements.” Tian Lihui said.

Recently, documents disclosed by the Shanghai Stock Exchange showed that Junzhijian Investment, Haizhiyuan Investment, Agricultural Bank Huili Fund, and ICBC AXA Asset Management were supervised and warned by the Shanghai Stock Exchange due to irregularities in the offline launch process. It is worth noting that the problems revealed by the four institutions are highly concentrated in two areas: first, inadequate internal system construction and inadequate implementation of internal controls; second, insufficient internal research and unprudent pricing decisions. “The wording of the four penalty decisions is highly convergent, which just shows that the problem is no longer an individual case, but a shortcoming in the industry system.” Tian Lihui, a finance professor at Nankai University, told First Finance Correspondent that at a deeper level, the root cause of this phenomenon is a structural mismatch between new business positioning and compliance investment. “When a new business is viewed as a low-risk arbitrage tool for a long time, there will inevitably be a gap between the resources allocated by the institution and the professional pricing responsibilities required by the regulatory requirements.” Tian Lihui said.